If you are thinking of buying property in Spain then the big question is whether this is the right time to buy or the time in which to keep your ‘powder dry’ and wait. In short, is the Spanish property market stabilising or still sliding?
Well, it appears as though the Spanish property market may be stabilising. Certainly, various statistics issued over the past year seem to indicate that price decreases are now less than they have been since the start of the recession in late 2007 and that there has been a significant rise in property sales to foreigners. The latter has been driven by most of Northern Europe coming out of recession and (for the British) a rise in the value of Sterling over the Euro.
Anecdotally (a very important measure, given Spain’s notoriously inaccurate statistics) the market is certainly stabilising for prime location, character properties – with estate agents seeing a rise in the number of foreign buyers that has not been experienced for several years.
Of course, matters are not simple when it comes to the property market in Spain. It is a huge country and what happens in Marbella or Majorca is not the same as for a small village in Castilla La Mancha or Cordoba. Furthermore, Spain is saddled with a range of housing that varies from the sublime to the ridiculously toxic. So, the ghastly, ill thought-out, poorly constructed, terraced houses in a ‘ghost’ town outside Madrid have nothing to do with quality villas on a fine estate outside Gandia or Denia or prime location flats in Valencia or Madrid.
In short, a broad brush cannot be applied to the Spanish property market as a whole.
That said, it is fair to say that most foreign buyers are interested in only a fairly restricted band of properties in Spain and would neither touch nor be interested in the abundant toxic properties that abound within the Spanish property market.
Most foreign buyers want holiday homes or permanent homes located within fifteen minutes or so of the Mediterranean coastline. It is these properties that now seem to be bumping along the bottom of their price range, with prices hardening up and some actually rising. Indeed, it is quite likely that 2014 will be seen as the ‘bottom’ of the market for quality, prime location properties along the Mediterranean.
I stress quality, prime location properties because the coastline of Spain is littered with rubbish that you need to be careful to avoid. By this, I mean identical, new town houses or flats on the outskirts of a town or beach apartments miles from the nearest amenities or hideous identikit designed villas on estates where the promised golf course has not been constructed…
In the meantime, to quote a cliché ‘because something is cheap does not mean that it is a bargain’ and you need to exercise care when looking at Spanish property on the Mediterranean to make sure that what you are buying has something exceptional about it (whether it is a flat, town house or villa). Break this rule and you may inadvertently buy a toxic (or more or less toxic) property when you could have bought a superb home that, over time, would be a fine investment.
So – is the Spanish property market stabalising or still sliding?
Well, almost certainly for the types of properties that most of us want it is stabilising but you must be careful to make sure you know the difference between a quality property and one that is not – and that is not always as easy as it sounds…